Stocks Climb as Fed Puts Dec. Rate Hike in Play

Financial Markets Wall Street
NEW YORK — U.S. stocks ended sharply higher Wednesday after a volatile session as the Federal Reserve gave a vote of confidence in the U.S. economy by signaling a December interest rate hike was still on the table.

S&P financials, which benefit from higher borrowing rates, shot up following the Fed statement and led sector gains. The financial index ended up 2.4 percent, its biggest percentage gain in seven weeks. The KBW Nasdaq regional bank index jumped 4.1 percent.

S&P utilities, which tend to do worse when interest rates are rising, fell 1.1 percent and led S&P sector declines.

The Fed left rates unchanged, as expected, and, in a direct reference to its next meeting, put a December rate hike firmly in play. It also downplayed global economic headwinds in its statement.

Stocks initially sold off following the statement, with the S&P 500 erasing close to a 1 percent gain, but quickly rebounded to end at the day’s highs as investors saw the statement as a sign the Fed has confidence the U.S. economy can sustain a rate hike.

“Obviously the first move [in stocks] is down, which is conventional wisdom. However, I do like the idea of the Fed having more confidence in the economy, less concerned about the global backdrop and willing to ring the bell on the long-term health of the U.S. economy with a rate hike,” said Michael Marrale, head of research, sales and trading at ITG in New York.

The Fed hasn’t raised rates in nearly a decade.

The Dow Jones industrial average (^DJI) rose 198.09 points, or 1.1 percent, to 17,779.52, the Standard & Poor’s 500 index (^GSPC) gained 24.46 points, or 1.2 percent, to 2,090.35, its highest in more than two months.

The Nasdaq composite (^IXIC) added 65.55 points, or 1.3 percent, to 5,095.69, while the Nasdaq 100 index of biggest non-financial names rose 0.9 percent to 4,678.57, just shy of a 15-year high.

Movers and Shakers

A 4.1 percent gain in Apple (AAPL) shares to $119.27 also helped support indexes a day after stronger-than-expected results.

The company sold 48 million iPhones in the latest quarter and posted a near doubling of revenue from China, allaying concerns about its business in the world’s second-largest economy.

On the flip side, Twitter (TWTR) shares fell 1.5 percent to $30.87 while Akamai Technologies (AKAM) dropped 16.7 percent to $62.91, Both reported disappointing results late Tuesday.

The S&P energy sector snapped a three-day losing streak, ending up 2.2 percent, after a sharp rally in crude oil prices .

After the bell, shares of GoPro (GPRO) dropped 15.2 percent to $25.62 following its results.

Advancing issues outnumbered declining ones on the NYSE by 2,428 to 645, for a 3.76-to-1 ratio on the upside; on the Nasdaq, 2,252 issues rose and 605 fell for a 3.72-to-1 ratio favoring advancers.

The S&P 500 posted 35 new 52-week highs and six new lows; the Nasdaq recorded 155 new highs and 82 new lows.

About 8.5 billion shares changed hands on U.S. exchanges, well above the 7.1 billion daily average for the past 20 trading days, according to Thomson Reuters (TRI) data.

Chuck Mikolajczak contributed reporting.

What to watch Thursday:

  • At 8:30 a.m. Eastern time, the Labor Department releases weekly jobless claims, and the Commerce Department releases third-quarter gross domestic product.
  • At 10 a.m., Freddie Mac releases weekly mortgage rates, and the National Association of Realtors releases pending home sales index for September.

Earnings Season
These selected companies are scheduled to report quarterly financial results:

  • Aetna (AET)
  • Altria Group (MO)
  • ConocoPhillips (COP)
  • Goodyear Tire & Rubber Co. (GT)
  • Johnson Controls (JCI)
  • LinkedIn (LNKD)
  • MasterCard (MA)
  • Starbucks (SBUX)
  • Teva Pharmaceutical (TEVA)
  • Time Warner Cable (TWC)

Stocks Slip as Investors Digest Fed, Earnings

Financial Markets Wall Street
NEW YORK — U.S. stocks ended slightly lower Thursday as the market digested the potential for an interest rate hike in December and some disappointing tech earnings reports.

The Federal Reserve, which kept rates unchanged at its policy meeting that ended Wednesday, downplayed concerns about global growth and indicated confidence in the U.S. job market’s recovery.

Stocks had jumped Wednesday following the Fed statement and, after a strong run from the end of September, were due for a “reprieve,” said Jason Ware, chief investment officer at Albion Financial, in Salt Lake City.

I would just say that we had a big move and this is a bit of a cooling pause the next day.

“I would just say that we had a big move and this is a bit of a cooling pause the next day,” Ware said.

The three indexes are on track for their best month in four years.

S&P utilities, which tend to do worse when interest rates are rising, were the worst-performing S&P sector, off 0.6 percent.

The Dow Jones industrial average (^DJI) fell 23.72 points, or 0.1 percent, to 17,755.8, the Standard & Poor’s 500 index (^GSPC) lost less than a point to 2,089.41 and the Nasdaq composite (^IXIC) dropped 21.42 points, or 0.4 percent, to 5,074.27.

The three indexes recovered much of the day’s losses late in the session.

Stocks were “treading water” after the Fed statement, said John Mousseau, executive vice president at Cumberland Advisors in Sarasota, Florida.

“Low interest rates have been the anchor for stock prices for a while,” Mousseau said.

Odds of a December hike increased to 50 percent from 43 percent Wednesday, according to the CME Group’s FedWatch program.

The S&P health care sector rose 0.4 percent, making it the top-performing sector, as Allergan’s (AGN) shares shot up 6 percent to $304.38. The Botox-maker confirmed it was in buyout talks with Pfizer. Pfizer (PFE) dropped 1.9 percent.

Sixty percent of the S&P 500 companies have reported quarterly results so far. Analysts now expect overall third-quarter profit to decline a modest 1.7 percent, compared with the 4.2 percent drop forecast on Oct. 1, according to Thomson Reuters data.

Movers and Shakers

NXP Semiconductors (NXPI) sank 19.7 percent to $73 after its bleak forecast. The slide took down other chipmakers, with the broader semiconductor index down 3 percent.

F5 Networks (FFIV) shares fell 9.3 percent to $110.08 after a disappointing outlook, making it the biggest percentage loser in the S&P 500 technology index.

GoPro (GPRO) slumped 15.2 percent to $25.62 after the action camera maker posted disappointing results.

Declining issues outnumbered advancing ones on the NYSE by 1,852 to 1,185, for a 1.56-to-1 ratio on the downside; on the Nasdaq, 1,820 issues fell and 959 advanced for a 1.90-to-1 ratio favoring decliners.

The S&P 500 posted 28 new 52-week highs and 6 lows; the Nasdaq recorded 102 new highs and 76 new lows.

About 7 billion shares changed hands on U.S. exchanges, about even with the 7.1 billion daily average for the past 20 trading days, according to Thomson Reuters (TRI) data.

Caroline Valetkevitch and Abhiram Nandakumar contributed reporting.

What to watch Friday:

  • The Commerce Department releases personal income and spending for September, and the Labor Department releases the third-quarter employment cost index at 8:30 a.m. Eastern time.
  • The University of Michigan releases its final survey of consumer sentiment for October at 10 a.m.

Earnings Season
These selected companies are scheduled to report quarterly financial results:

  • Anheuser-Busch Inbev (BUD)
  • Choice Hotels International (CHH)
  • Colgate-Palmolive (CL)
  • CVS Health (CVS)
  • Exelon (EXC)
  • Exxon Mobil (XOM)
  • Weyerhaeuser (WY)

GoPro Misses, Comcast Races

GoPro Raises $427 Million, Pricing IPO At Top Of Range

There were plenty of winners and losers this week, with the world’s leading maker of wearable cameras falling well short of its own guidance and a cable giant making another smart move at its theme parks division.

Comcast (CMCSK) — Winner

Comcast’s Universal Studios theme park in Florida announced a new attraction will open come 2017. “Race Through New York Starring Jimmy Fallon” will replace the park’s immersive “Twister” simulation.

Theme parks announce new rides often, but this particular addition makes the cut on its synergistic merit. Comcast owns the Universal Studios theme park chain and it also owns Fallon’s late-night home of NBC. With the marketplace heating up for late-night shows, every little bit helps. Universal Studios Florida attracts millions of park guests a year, giving the new ride Comcast-friendly branding power.

General Motors (GM) — Loser

This seems to be the year of auto recalls, and this week GM asked owners of 1.4 million older vehicles worldwide to bring in their cars to repair an issue in which drops of hot oil can cause engine compartments to catch fire.

Recalls are a part of the automotive industry, but this is the fourth time that GM has had a recall for the same problem.

Microsoft (MSFT) — Winner

It’s been nearly two years since the Xbox One hit the market, but now it’s going to get a feature that it should’ve had from the beginning. Microsoft revealed that an upcoming software update will make the console backward-compatible with some Xbox 360 games.

The inability to play discs from the previous Xbox generation likely led some die-hard gamers to hold back on making the initial investment. It’s hard to buy an Xbox One when you know you can’t trade in your Xbox 360 for credit because you’ll need it to play your favorite games.

The software update isn’t perfect. Many of the bigger Xbox 360 games still won’t be compatible. It’s still a step in the right direction, and just ahead of the holiday shopping season to boot.

GoPro (GPRO) — Loser

You would think that posting quarterly results featuring a 43 percent surge in revenue to $400.3 million and adjusted earnings more than doubling to 25 cents a share would be a cause for celebration, but that didn’t happen for GoPro — and with good reason.

The leading maker of wearable camera’s earlier guidance was calling for revenue of at least $430 million and a profit of at least 29 cents a share. It’s not a good sign when you can’t live up to your own historically conservative guidance and GoPro’s guidance for the current quarter isn’t very encouraging.

Taco Bell — Winner

History books will claim that the Kansas City Royals won the first game of the World Series, but another winner was Yum Brands’ (YUM) Taco Bell. The fast-food chain teamed up with Major League Baseball for a promotion where it would reward all customers with a free A.M. Crunchwrap if someone stole a base.

Of course someone stole a base, and of course Taco Bell will now be giving away a ton of its signature breakfast wrap next Thursday. It’s a brilliant move, as Taco Bell is trying to stand out since entering the cutthroat breakfast market last year.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of and recommends GoPro. The Motley Fool owns shares of Microsoft and recommends General Motors. Try any of our Foolish newsletter services free for 30 days. Check out The Motley Fool’s one great stock to buy for 2015 and beyond.

Stocks Slip but Post Best Month in 4 Years

Financial Markets Wall Street
NEW YORK — U.S. stock indexes finished with their strongest monthly performances in four years Friday, even as they fell for the day amid a mixed bag of earnings reports.

For October, all three major indexes posted their biggest percentage increases since October 2011, with the S&P 500 rising 8.3 percent, led by energy and materials, while a measure of volatility fell.

On Friday, CVS Health (CVS) fell 4.8 percent to $98.78 after a disappointing profit forecast for 2016.

The S&P 500 energy index was the best performing sector, rising 0.7 percent. Exxon (XOM) rose 0.6 percent and Chevron (CVX) 1.1 percent after better-than-expected results.

Investors will be looking at data over the next several weeks, including next Friday’s employment report, for clues about the economy’s health. The Fed signaled Wednesday a rate hike in December was still possible.

“The market is being held a little bit hostage,” said Jeff Buetow, chief investment officer at Innealta Capital in Austin. “It would be nice to have some clarity once and for all of what monetary policy is going to do over the foreseeable future.”

The Dow Jones industrial average (^DJI) fell 92.26 points, or 0.5 percent, to 17,663.54, the Standard & Poor’s 500 index (^GSPC) lost 10.05 points, or 0.5 percent, to 2,079.36 and the Nasdaq composite (^IXIC) dropped 20.53 points, or 0.4 percent, to 5,053.75.

For the month, the Dow gained 8.5 percent, while the Nasdaq rose 9.4 percent.

In a signal of a return to calm in markets, the CBOE volatility index fell 38.5 percent in October – its largest monthly percentage decline on record.

“We’re not likely to see another month like this anytime soon,” said Marshall Gause, chief executive of Geneva Fund Partners in Denver. “This month was a rebound off the lows.”

For the week, the Dow inched up 0.1 percent, the S&P increased 0.2 percent, and the Nasdaq rose 0.4 percent. The S&P posted its fifth straight week of gains, its longest such streak this year.

Winners and Losers

The S&P health care sector index rose 3.1 percent for the week, the best weekly gain since March, spurred by strong pharmaceutical earnings.

Shares of drugmaker AbbVie (ABBV) jumped 10.1 percent Friday to $59.55, the biggest positive driver for the S&P 500 index, after better-than-expected profit and a strong long-term outlook.

Consumer staples slipped 1.1 percent. U.S. consumer spending barely rose in September and the University of Michigan’s index on consumer sentiment came in below expectations.

The S&P financial sector index fell 1.4 percent, with Genworth Financial (GNW) tumbling 10.3 percent to $4.68 after results.

U.S.-listed shares of Valeant Pharmaceuticals (VRX) dropped 15.9 percent to $93.77, its lowest since July 2013, after cutting all ties with specialty pharmacy Philidor.

LinkedIn (LNKD) shot up 11 percent to $240.87 while Expedia (EXPE) jumped 7.3 percent to $136.30 after results beat estimates.

NYSE advancing issues outnumbered declining ones 1,647 to 1,404, for a 1.17-to-1 ratio; on the Nasdaq, 1,638 issues fell and 1,161 advanced, for a 1.41-to-1 ratio favoring decliners.

The S&P 500 posted 18 new 52-week highs and 4 lows; the Nasdaq recorded 49 new highs and 78 lows.

About 7.4 billion shares changed hands on U.S. exchanges, above the 7.1 billion average for the past 20 trading days, according to Thomson Reuters (TRI) data.

Tesla Updates, Taco Bell’s Freebie

Consumer Reports Auto Rankings

From the country’s leading video game publisher putting out its latest combat title to a once-promising 3-D printing pioneer posting what should be another quarter of disappointing results, here are some of the things that will help shape the week that lies ahead on Wall Street.

Monday — Lone Star

Texas Roadhouse (TXRH) kicks off the new trading week with its latest quarterly results. Casual steakhouses were all the rage two decades ago, but most of the players have either gone private, closed down or been acquired as part of larger operators.

Texas Roadhouse is one of the few remaining standalone players. Wall Street sees top- and bottom-line growth in the low double digits.

Tuesday — The Electric Slide

Tesla Motors (TSLA) checks in with fresh financials Tuesday. The coolest maker of plug-in electric vehicles — if not the coolest car maker, period — has seen its stock start to give back some of its heady gains.

The stock has surrendered roughly a quarter of its value since peaking last summer. It didn’t help that Consumer Reports — the magazine that called its Model S the best car it ever tested — shifted into reverse on its initial recommendation after assessing enough data to gauge the car’s reliability.

Tesla should update the market on its Model X crossover SUV and its progress toward autonomous self-driving cars.

Wednesday — Printing Pressed

3-D printing was all the rage a couple of years ago, but the once high-flying stocks have been taking a dive since last year. The printers are too expensive, slow and limited in mainstream applications. 3D Systems (DDD) is one of the key players — and it reports Wednesday.

The stock has taken a beating. It has shed two-thirds of its value this year, and that was after losing nearly two-thirds of its value in 2014. As cheap as the stock may seem, Wall Street isn’t ringing a dinner bell. JPMorgan (JPM) lowered its price target on the shares just last week.

Thursday — There’s No Free Lunch, But There Is a Free Breakfast

Yum Brands’ (YUM) Taco Bell will be giving away free A.M. Crunchwraps all morning after a clever promotion. It teamed up with Major League Baseball during the first game of the World Series. If anyone would steal a base, customers would be able to “steal” a free breakfast wrap.

Stolen bases are common, so it was really just a matter of time before Lorenzo Cain would steal one. The promo will take place Thursday from 7 a.m. to 11 a.m. It should make drive-through lines longer at Taco Bell, but it’s ultimately a great way to promote its breakfast offerings.

Friday — Game On

Activision Blizzard (ATVI) has been busy cranking out video games. The country’s largest video game publisher recently released “Guitar Hero Live,”breathing new life into a franchise that it had seemingly left for dead five years earlier. On Friday it releases “Call of Duty: Black Ops 3,” the latest installment in its best-selling franchise.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Activision Blizzard and Tesla Motors. The Motley Fool recommends 3D Systems and Texas Roadhouse. Try any of our Foolish newsletter services free for 30 days, and click here to check out our free report for one great stock to buy for 2015 and beyond.

Visa to Buy Visa Europe in Deal That Could Exceed $23 Billion

NEW YORK — Payment processing giant Visa announced plans Monday to buy its sister company, Visa Europe, in a deal that could be worth more than $23 billion and would consolidate all of Visa’s operations worldwide.

The deal would make the world’s largest payment processing company even larger. The two companies have more than 2.9 billion cards issued on its combined network, processing roughly 88 billion individual transactions a year.

“We are very excited about unifying Visa into a single global company with unmatched scale, technology and services,” said Charles Scharf, Visa’s chief executive officer, in a prepared statement.

Under the terms of the transaction, Visa will pay 11.5 billion euros ($12.66 billion) in cash plus stock valued at about $5.5 billion. Visa Europe shareholders would also earn an additional payment valued at nearly $5.2 billion if certain revenue targets are met four years after the deal is closed, which is expected in mid-2016.

Visa plans to pay for the transaction through the issuance of $15 billion to $16 billion in new debt.

Stocks Climb, Led by Energy, Health Care

Financial Markets Wall Street Hewlett Packard Enterprise
NEW YORK — U.S. stocks added to their recent run with gains across all sectors on Monday, led by increases in the beaten-down energy group and the acquisition-driven health care industry.

The gains on the first trading day of the month followed the best monthly performance of the major indexes in four years in October. The Nasdaq 100 closed Monday at its highest level in more than 15 years.

Data on Monday showed U.S. manufacturing activity in October sank to a 2½-year low, but a rise in new orders offered encouragement. Elsewhere, factory activity in Germany beat economist estimates, and manufacturing in Central and Eastern Europe kept up a robust pace in October.

“The fact that we have got sturdy numbers from outside the U.S. accompanied by a relatively decent … [U.S. manufacturing] report, I think that cocktail was supportive of risk assets getting a boost,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

The Dow Jones industrial average (^DJI) rose 165.22 points, or 0.9 percent, to 17,828.76, the Standard & Poor’s 500 index (^GSPC) gained 24.69 points, or 1.2 percent, to 2,104.05 and the Nasdaq composite (^IXIC) added 73.40 points, or 1.5 percent, to 5,127.15.

The S&P, which is up nearly 13 percent since hitting its lowest level for the year in August, broke through the 2,100 barrier, bringing it nearer to its all-time closing high of 2,130.82 in May.

“The upward trend that was put in place last week has continued to gain steam,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. “I don’t necessarily think there’s a specific catalyst for it today. Risk appetite has clearly increased.”

As the U.S. earnings seasons winds down, investors are looking to economic data, including this Friday’s employment report, for clues as to whether the Federal Reserve will raise interest rates when it meets in December.

Movers and Shakers

The S&P energy index rose 2.4 percent. Oil majors Exxon and Chevron were two of the three biggest drivers of positive performance for the Dow after both companies posted better-than-expected results on Friday. Chevron (CVX) gained 4.5 percent to $94.96 and Exxon (XOM) finished up 3.1 percent at $85.28.

The S&P health care index increased 2 percent. Pfizer rose 3.7 percent, and AbbVie (ABBV) jumped 6.4 percent, providing the biggest boost to the sector.

Dyax (DYAX) soared 28.4 percent to $35.35 after British drugmaker Shire said it would buy the company for about $5.9 billion. The Nasdaq biotechnology index closed up 3.8 percent.

U.S.-listed shares of Valeant (VRX) rose 7.1 percent at $100.47 after short-seller Citron Research said it wouldn’t be releasing new allegations against the Canadian drugmaker.

The S&P financial sector gained 1.6 percent, led by increases from the big banks. Visa (V) fell 3 percent to $75.22 after offering to buy its former subsidiary Visa Europe for as much as $23.3 billion. The stock was the biggest drag on the Dow and the S&P 500.

Hewlett-Packard started trading after its split. HP (HPQ) jumped 13 percent to $13.83, while Hewlett Packard Enterprise (HPE) slipped 1.6 percent to $14.49.

Advancing issues outnumbered declining ones on the NYSE by 2,525 to 569, for a 4.44-to-1 ratio on the upside; on the Nasdaq, 2,217 issues rose and 628 fell for a 3.53-to-1 ratio favoring advancers.

The S&P 500 posted 25 new 52-week highs and four new lows; the Nasdaq recorded 76 new highs and 44 new lows.

Auto Industry Headed for Record Sales in 2015, GM Says

Inside A Car Dealership Ahead Of Motor Vehicle Sales Figures
DETROIT — The U.S. auto industry is on track for a record year of annual sales, General Motors said Tuesday, as the top U.S. automaker and its rivals reported October sales that far exceeded expectations.

GM said U.S. auto sales are on pace to end 2015 topping the 2000 record of 17.35 million vehicles sold, according to WardsAuto figures.

At a seasonally adjusted annualized rate, October sales were 18.24 million vehicles, according to Autodata Corp., which is the highest October level since 2001, when automakers offered zero percent financing in the aftermath of the Sept. 11 attacks, the company said.

In 2009, at the depth of the Great Recession, U.S. auto sales fell to 10.4 million vehicles.

October was a huge month for the industry, smashing expectations and continuing its hot streak.

U.S. October auto industry sales rose 13.6 percent from a year ago. Analysts had forecasted October sales to be 8 to 12 percent higher than last year. A Reuters poll of 45 economists showed expectations of a seasonally adjusted annualized sales rate of 17.7 million vehicles for last month.

“October was a huge month for the industry, smashing expectations and continuing its hot streak,” said Bill Fay, Toyota’s U.S. general manager.

The booming October sales materialized despite concerns about a slowdown in consumer spending and stagnant wages.

U.S. economic data suggests consumer spending lost momentum at the end of the third quarter, with consumption in September posting its smallest increase in eight months. Personal incomes also barely rose that month.

GM said its sales rose 16 percent to 262,993 vehicles last month, marking its best October since 2004.

Ford Motor, No. 2 in the U.S. auto market by sales, reported it sold 213,938 vehicles last month, a 13 percent rise from the same period last year. Ford’s U.S. sales chief, Mark LaNeve, said the company commanded record average selling prices for its vehicles, at $34,600 a vehicle.

GM (GM) and Ford (F) shares were largely unchanged, each up less than 0.5 percent in afternoon trading.

Volkswagen sales were essentially unchanged, well below the overall industry, as it feels the sting of a diesel emissions scandal. Volkswagen sold 30,400 vehicles in the United States last month.

Fiat Chrysler Automobiles (FCAU) reported its 67th straight month of year-over-year gains, selling 195,545 vehicles in October, up 14.7 percent from a year earlier.

Toyota Motor (TM) said it sold 204,045 vehicles in October, up 13 percent.

Honda Motor (HMC) sales rose 9.3 percent to 131,651 vehicles.

Nissan Motor said its U.S. sales rose 12.5 percent to 116,047 vehicles in October, led by its Rogue small SUV, which had a 70 percent increase to nearly 25,000.

Mitsubishi Motors reported record October sales in the United States rose 19.8 percent to 7,426 vehicles from last year.

Tech, Energy Lead Wall Street Higher

Hewlett Packard CEO Meg Whitman Rings NYSE Opening Bell
NEW YORK — Big tech and energy sector gains drove U.S. stocks higher Tuesday, as an index of 100 major Nasdaq companies finished at a record closing high.

The three major indexes continued a positive start for November, after posting their best monthly performances in four years in October. The Nasdaq 100 index closed up 0.3 percent at 4,719.05, surpassing for the first time levels reached during the dot-com boom in 2000.

The S&P energy sector rose 2.5 percent, its fifth straight daily increase, as crude prices rallied. Oil majors Exxon (XOM) and Chevron (CVX) rose 1.8 percent and 3.3 percent, respectively, making both stocks among the top influences on the Dow and S&P.

People are looking for beaten down names in industries that may represent value.

While energy stocks have risen about 22 percent since late August, the sector is still down roughly 10 percent year to date.

“People are looking for beaten down names in industries that may represent value,” said Robert Pavlik, chief market strategist at Boston Private Wealth in New York. “Towards the end of the year, the market starts to move up and people are fearful they’re going to be left behind.”

The Dow Jones industrial average (^DJI) rose 89.39 points, or 0.5 percent, to 17,918.15, the Standard & Poor’s 500 index (^GSPC) gained 5.74 points, or 0.3 percent, to 2,109.79 and the Nasdaq composite (^IXIC) added 17.98 points, or 0.4 percent, to 5,145.13.

Six of the 10 S&P sector groups ended positive, including a 0.6 percent rise for the tech sector. Apple rose 1.1 percent to $122.57 and Microsoft (MSFT) rose 1.7 percent to $54.15, with both companies the most positive influences on the S&P and Nasdaq.

Big Game Deal

Activision Blizzard (ATVI) rose 3.6 percent to $35.82 and was the sixth biggest boost on the Nasdaq after the video-game company said it would buy “Candy Crush” maker King Digital for $5.9 billion. King (KING) soared 14.9 percent to $17.85.

As the third-quarter earnings season winds down, investors will be looking to Friday’s employment report and other economic data for clues as to whether the Federal Reserve will raise rates in December.

U.S. companies have posted stronger-than-expected quarterly results in general so far this earnings season. As of earlier Tuesday, of the 379 S&P 500 companies that had reported results, 70 percent beat profit estimates, compared with 63 percent in a typical quarter, according to Thomson Reuters I/B/E/S.

One exception was insurer AIG (AIG), whose shares fell 4.4 percent to $60.96 after the insurer’s quarterly profit missed estimates by a wide margin. CEO Peter Hancock said Carl Icahn’s proposal to break up the company didn’t “make financial sense.”

Agribusiness Archer Daniels Midland (ADM) dropped 6.8 percent to $43.15 after missing profit estimates. Altria fell 4.4 percent to $57.85 after a rating cut. The two were the biggest drags on the consumer staples sector.

Sprint (S) fell 7 percent to $4.51 after the wireless carrier reported lower-than-expected results.

Advancing issues outnumbered declining ones on the NYSE by 1,789 to 1,283, for a 1.39-to-1 ratio on the upside; on the Nasdaq, 1,676 issues rose and 1,124 fell for a 1.49-to-1 ratio favoring advancers.

The S&P 500 posted 20 new 52-week highs and 1 new lows; the Nasdaq recorded 82 new highs and 29 new lows.

Kraft Heinz to Close 7 Factories, Shed 2,600 Jobs

Earns Kraft Foods
IOWA CITY, Iowa — Kraft Heinz (KHC) will close seven plants in the U.S. and Canada as part of a downsizing that will eliminate 2,600 jobs, or roughly 14 percent of its North American factory workforce, the newly merged food company announced Wednesday.

The company said the closures, which will take place over the next two years, are part of a plan to save $1.5 billion in operating costs by the end of 2017. The plants slated for closure are in California, Maryland, New York, Pennsylvania, Wisconsin and Ontario.

Among the hardest hit cities will be Madison, Wisconsin, where a nearly century-old Oscar Mayer plant that employs 700 production workers will close. Kraft Heinz said it would also move about 250 corporate jobs from Madison to Chicago, the company’s co-headquarters along with Pittsburgh.

One of the plant’s workers, 46-year-old Rick Schroeder, said he was stunned to hear about the closing through news reports rather than from the company. He said his father also worked at the plant for 35 years and operated a pig farm, and remembers going with his father to deliver pigs to the plant.

“They always say when one door closes, another opens,” said Schroeder, a janitor at the plant. “Gotta have faith. Move on, that’s all you can do. Sad day in Madison.”

The company said it would also close plants in Fullerton and San Leandro, California; Federalsburg, Maryland; St. Marys, Ontario, Canada; Campbell, New York; and Lehigh Valley, Pennsylvania. The plants make a range of products, including cold cuts, salad dressing, macaroni and coffee.

The company also will shift meat production from its Oscar Mayer plant in Davenport, Iowa, to a planned $203 million plant that will be built several miles away. City and state officials said the new plant is expected to retain at least 475 jobs, compared to more than 1,200 jobs at the existing plant, which is touted as the world’s largest bologna factory.

“Our members are scared of the unknown,” said Jerry Messer, president of the Davenport chapter of the United Food and Production Workers, which represents employees. But he said he was glad jobs weren’t expected to be cut for two years, and he hoped the new factory would eventually bring growth.

The Iowa Economic Development Authority will meet Thursday to consider approving a package that includes $1.75 million in tax benefits for the new plant and a $3 million forgivable loan to the company to demolish the old one. The city is expected to add a 15-year tax rebate worth an estimated $10 million.

Authority spokeswoman Tina Hoffman defended the investment, despite the expected job cuts.

“It’s certainly an unfortunate situation,” she said. “We have been working closely with the community to make sure we could position Davenport to retain as many jobs as possible and position that facility for future growth.”

Some downsizing had been expected following the merger of Kraft and Heinz earlier this year. After the facilities close, Kraft Heinz will have 41 plants in North America that employ about 18,000 people.

“Kraft Heinz fully appreciates and regrets the impact our decision will have on employees, their families and the communities in which these facilities are located,” Michael Mullen, a senior vice president, said in a statement.

He said affected workers would be offered severance benefits, and that the changes were “a critical step in our plan to eliminate excess capacity and reduce operational redundancies for the new combined company.”

In Madison, Mayor Paul Soglin said the local plant will be hit in three waves of layoffs. He called the workers the “heart and soul” of the city’s north side.

“It’s an institution for the city of Madison,” added state Sen. Fred Risser, 88, who said he worked at the plant as a teenager during World War II. “We’re going to miss it. It’s like a death in the family.”